Moody’s has assigned Sky Protocol, the issuer behind the USDS stablecoin, a B3 issuer rating with a stable outlook, its first rating of a stablecoin protocol, according to Sky’s release reported by The Block. Sky says that makes it the only stablecoin protocol formally rated by both Moody’s and S&P. The grade is low. The fact that a protocol got graded at all is the story.
The Sky Protocol rundown
- What changed: Moody’s now rates Sky, formerly MakerDAO, at B3, six notches below investment grade on Moody’s long-term scale. S&P rated it B- in August 2025, citing depositor concentration, centralised governance and weak capital buffers.
- Why it matters: ratings let credit desks plug a protocol into the frameworks they already use. Galaxy added $100 million of sUSDS, the savings version of USDS that pays a yield, to its treasury last month and accepts it as collateral, The Block reported. Institutions do not buy what they cannot score.
- Where it breaks: a B3 is speculative grade, with high credit risk by Moody’s own definitions. Sky’s release says it remains “focused on supporting efforts to raise the level of Sky Reserves”, which tells you where the agency’s concern sits: the capital buffer between the protocol’s assets and USDS holders. Thin buffers, governance concentration and smart-contract risk are what a rating cannot diversify away.
- By the numbers: USDS supply stood at about $6.84 billion on 7 Oct, according to DefiLlama. The SKY token traded near $0.080 at 14:00 UTC on Kraken, down about 10% from Tuesday.
A rating is a floor, not a halo. My read is that the second rating matters more than the first: two agencies now give credit committees a comparable view of a DeFi issuer, and the next question is whether reserves move the grade up.
Related: How yield-bearing stablecoins work
Moody’s rating definitions are published in its rating symbols and definitions guide.
This article is for information only and is not investment advice.